Following concerns about the possible impact of the Eurozone crisis on the UK’s growth prospect, the US agency have put the UK on “negative outlook”, implying there is a thirty percent change the UK could lose its AAA credit rating within the next eighteen months.
Moody’s said in a statement: “The increased uncertainty regarding the pace of fiscal consolidation in the UK due to materially weaker growth prospects over the next few years, with risks skewed to the downside.
“Any further abrupt economic or fiscal deterioration would put into question the government's ability to place the debt burden on a downward trajectory by fiscal year 2015-16.
“Although the UK is outside the Euro area, the high risk of further shocks within the currency union are exerting negative pressure on the UK's AAA rating given the country's trade and financial links with the Euro area.
“Overall, Moody's believes that the considerable uncertainty over the prospects for institutional reform in the Euro area and the region's weak macroeconomic outlook will continue to weigh on already fragile market confidence across Europe.”
Other European countries including Austria and France have also been warned about the future of their credit rating; whilst Italy, Portugal and Spain have had their ratings lowered.
For more information, please visit www.milsted-langdon.co.uk
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